I can tell you what happened on two deals. I can't tell you what any seller's guarantee says, because I don't hold those documents and neither do most buyers until after they've committed.
That gap is the whole point of this article.
Turnkey
The Turnkey Repairs Guarantee: What It Covered on Two Real Deals, and What It Doesn't
Some turnkey property sellers offer a repair guarantee. It's often mentioned in the marketing, but the wording matters far more than the headline. Here's what happened when two significant repair issues appeared on two of my clients' purchases, including one $2,500 post-closing repair the seller covered under its guarantee.
David Garner · Co-Founder
Key takeaways
- On one deal, $2,500 of water damage after closing was covered in full. The owner paid nothing.
- On the other, a $4,000 collapsed drain was paid by the seller before closing, because an appraiser flagged it.
- Both were fixed without the buyer paying. Neither was paid by insurance, and I wouldn't have expected either to be.
- A repairs guarantee is not a home warranty and it is not insurance. Three different instruments, three different failure modes.
- The guarantee I'd distrust most is the one on the rent, not the one on the repairs.
- Ask for the wording before you're under contract. The value of a guarantee is entirely in its exclusions.
What is a turnkey repairs guarantee?
As I'm using the term here, it's a seller's promise to put right some problems connected with the renovation, for a stated period after closing. What it covers depends on the wording and nothing else.
That's as precise as I can be. There's no one standard version of this. Terms can differ by seller, by contract and by state, which is why I care about the wording rather than the label.
I'm paid an advisory fee on the renovated houses I introduce to overseas investors, charged to the seller, so I'm one of the parties in this chain. The honest guide to turnkey investing prices my layer. What I can add here is what I've watched a guarantee do twice, on deals where I hold every other document.
What a guarantee is not is a substitute for checking the house. An inspection tests the work before you own it. A guarantee is what you fall back on when something gets through anyway. The sequence I'd run before buying treats them as two separate steps, in that order.
What did it actually pay for on two deals?
Two things, and they're usefully different from each other.
| Deal A, the 1953 house | Deal B, the 1912 house | |
|---|---|---|
| What went wrong | Water damage after closing, from debris blocking a drain after a storm | Collapsed cast iron house trap under the basement floor |
| When | After the buyer owned it | Before closing |
| Cost | $2,500 | $4,000 |
| Who paid | The seller, under the repairs guarantee | The seller, before completion |
| What the owner paid | Nothing | Nothing |
| How it was found | It happened | An appraiser made his valuation conditional on a plumbing inspection |
The first one is the seller honoring the guarantee in practice. The buyer reported the problem after closing. The seller accepted it and paid the $2,500. That house had been taken back to the studs and had passed two inspections, the second one recording 95 of 95 checked items as acceptable. Then a storm, a blocked drain, and $2,500 of water damage anyway. In ten months of ownership that is the only repair of any kind on that house.
The second one is Karl's house, and it isn't the guarantee at all. That distinction matters. Nothing had gone wrong after a sale, because the sale hadn't happened. The appraiser wrote one cautious sentence, the drain was excavated, a collapsed house trap came out, schedule 40 PVC went in, and a camera confirmed the rest of the line was sound. The seller paid because it was still his house.
So one is a promise honored and one is a problem found in time. Both cost the buyer nothing, and only one of them tells you anything about the guarantee. I've set both out with every document in two turnkey houses, thirteen documents.
Why didn't insurance cover either of those?
Neither problem is an insurance matter by default. Whether a landlord policy responds turns on the cause of loss, the wording, any endorsements and the deductible.
Insurance is the one area where I'd never trust a table over the policy itself. Cover varies by insurer, by policy form and by endorsement. The table below shows how I'd split the questions up. It does not show what your policy will pay.
| The problem | Insurance | Repairs guarantee |
|---|---|---|
| A tree comes through the roof | Often covered, subject to the policy and the deductible | Not usually |
| A pipe bursts and floods a room | Resulting damage may be covered | Could apply if caused by recent defective work |
| A drain blocks and water backs up | Depends heavily on the policy and water-backup coverage | Could apply if connected to covered renovation work |
| The renovation was done badly | The bad work itself is usually excluded. Damage it causes depends on the policy | This can be the point of it, depending on wording |
| The furnace reaches the end of its life | Usually maintenance or capital, not an insured loss | Depends on the wording |
| The tenant damages the kitchen | Depends on the cause and the policy | Not usually |
And the deductible is one of the lines that decides whether a small claim is worth making at all. On a $2,500 repair with a $1,000 or $2,500 deductible, the sums change fast. I've published five real quotes on like-for-like houses running from $1,171 to $2,210 in landlord insurance for foreign and out-of-state owners. The deductible made a real difference to how much use those policies would have been on a small claim.
The practical point is that the three do different jobs. Check the guarantee if the problem may relate to the renovation work. Check the policy if the event may be insured. And keep a reserve, because plenty of costs belong to neither.
How is a guarantee different from a home warranty?
What the trade calls a "home warranty" is usually a service contract you buy from a third party. A seller's repairs guarantee is a promise that comes with the sale.
That difference decides who you chase when something breaks.
A home warranty runs for a stated term. You pay for the contract, and often a fee each time you make a claim. It covers named systems and appliances, subject to its own limits and exclusions.
The seller guarantee I'm talking about here was not a contract bought on its own. Its value rested on the seller standing behind the work after closing. If that company folds or runs out of money, enforcing the promise can get much harder. That's why it matters who gave it, and whether they could pay.
That's not a reason to dismiss it. I give more weight to a promise when I can find out who stands behind it, how long they've worked in that market, and how they handled the last claim. How I evaluate turnkey companies goes through what I look at.
Which guarantee would I distrust?
The rent guarantee, every time, and it's worth separating it from the repairs promise firmly.
The kind of repairs guarantee I'm discussing is meant to deal with bad renovation work. That's a narrow promise, about work the seller controlled. A rent guarantee says someone will pay you rent whether or not there's a tenant. That's a promise about the future, from a party who can only keep it while their own cash lasts.
I've watched the same argument play out in Section 8 marketing, where the fact that a housing authority pays part of the rent gets stretched into the claim that income is guaranteed. It isn't, and I've set out why in whether Section 8 is actually a good investment.
The questions I'd ask about any rent guarantee are simple and rarely answered well. How long does it run? Is it in the purchase contract or in a brochure? What happens if the guarantor stops trading? And is the rent being guaranteed above or below what the market actually pays?
That last one is the tell. If the promised rent sits well above market, I'd read the gap as money off the price, not as proof of what the house can hold. The appraiser's own rent opinion is one outside check. So if there's a loan on the house, I'd make sure I got the appraisal and read it.
What does a guarantee not cover?
Possibly a lot. The line sits wherever the written terms put it, and I wouldn't assume the ordinary costs of owning a house fall inside it unless the wording says so.
| What you'll actually pay for | Roughly |
|---|---|
| One turnover, on two real deals | $9,000 and $7,000, before the empty months |
| Roof, furnace and water heater together | $14,200 to $24,000 |
| A reserve I'd hold per property | $5,000 |
| Tenant damage beyond the deposit | Yours |
| Anything at all after the term expires | Yours |
None of that is the seller's fault or the guarantee's failure. It's ownership. Maintenance, repairs and capital are three different bills and a guarantee touches the narrowest of the three, for the shortest period.
Which is why the guarantee is not the reason a renovated house is worth paying for. The reason, for me, is that the roof, the systems and the pipes are new. That should push the big replacement costs further out, and it cuts the number of worn parts you take on from day one. What actually predicts your maintenance risk is the state of those parts, not the promise pinned to them.
And a guarantee doesn't remove the work of noticing. Somebody has to read the statement and spot the repair that shouldn't have been charged to you. That's twenty minutes a month, it's yours, and how a manager makes money on repairs is worth reading before you sign anything.
What would I ask before relying on one?
Seven questions, before you're under contract rather than after.
- Is it in writing, and is it in the contract? A promise in a brochure is a marketing claim. A promise in the purchase agreement is a term.
- How long does it run? Ninety days, six months and twelve months are all common, and the difference is most of the value.
- What does it cover, by name? Workmanship only, or named systems, or anything that fails. Ask for the list rather than the adjective.
- What's excluded? This is the answer that tells you what the guarantee is. Wear, tenant damage, consequential loss and anything outside the original scope of work are the usual four.
- Who does the work, and who chooses them? If the seller's own crew returns, that's fast and it's also the crew whose work is being judged.
- What's the process and the response time? Who do you call, in what time zone, and how long do they have?
- What happens if you stop trading? Nobody enjoys this question. The answer is usually nothing, and it's better to know.
I'd ask all seven of any seller, including the ones I introduce. The answers are also a test of the operator rather than only of the document, and that's most of what you're buying. The turnkey due diligence checklist sets out the rest of what to request and in what order, and the ten checks you can run without the seller's help covers what you can settle alone.
What matters more than the guarantee?
Three things, in this order, and none of them is a promise.
The inspection you commissioned. The guarantee is a fallback. The inspection is what stops you needing it. On Deal A the buyer's own inspector found sixteen items including three live water leaks on a house that had been gutted to the studs. All sixteen were corrected before closing and a re-inspection confirmed it in writing.
The reserve you funded. A guarantee covers whatever its wording covers for a limited period. Your reserve is the backstop for the ownership costs the guarantee doesn't reach, and it doesn't expire after ninety days. If the choice is a longer guarantee or another $5,000 in the account, take the money.
The operator's record. A guarantee is worth what the person behind it is worth. Ask how long they've renovated in that market, how many houses a year, and what happened the last time a buyer called them about a problem. Then ask that buyer.
Do those three and the guarantee becomes what it should be: a modest, useful backstop rather than the thing the deal rests on. If you'd rather have somebody run that process, buying a US rental remotely is the work I do, and the foreign investor starter kit has the question lists free. Run the numbers on your own assumptions with the rental property cash flow calculator before any promise persuades you of anything.
The bottom line
On the two deals I can document, both repair problems were resolved without the buyer paying for them. Only one happened after closing and was handled by the seller as a guarantee repair.
On one house $2,500 of post-closing water damage got fixed and the owner paid nothing. That's a good outcome and it's worth having. But the reason that house has cost its owner almost nothing in ten months isn't the guarantee. The renovation replaced the roof, wiring, plumbing and major systems, and the buyer had the finished work independently inspected and reinspected before closing.
A guarantee is the seller's promise about the past. A funded reserve is your provision for the future. One expires and the other doesn't, and only one of them is under your control.
So read the wording, ask the seven questions, and then price the house as though the guarantee didn't exist. If the deal still works on that basis, you've bought well and the guarantee is a bonus. If it only works because somebody promised to fix things, you haven't finished checking.
Investing isn't about certainties. It's about improving the odds, and a promise you haven't read is not an improvement.
This article is general information, not legal, tax or financial advice. David Garner is a property investor and is not a lawyer, tax adviser, accountant, insurance adviser or investment adviser. Cashflow Rentals is a real estate consultancy, not a real estate broker, and is not a lender, insurer or investment adviser. Cashflow Rentals is paid an advisory fee, charged to the renovating contractor, on the turnkey properties it introduces to clients, and that fee appears in both of the deals described here, which should be weighed against everything in this article. The two repairs described are two real transactions and are not a sample. No seller's guarantee wording has been reviewed for this article, and the general descriptions of guarantees, home warranties and insurance are illustrative rather than a statement of any particular policy or contract. Insurance figures are quotes gathered in 2026 on comparable houses and are not available to you. Cover, exclusions and guarantee terms vary by provider and by state. Always read your own documents and take advice from a qualified professional before buying.
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Frequently asked questions
What does a turnkey repairs guarantee actually cover?
There's no standard answer. The seller guarantee discussed in this article covered a post-closing repair, but I haven't reviewed enough guarantee contracts to give you a meaningful market-standard term. Read the actual wording before relying on one.
Is a repairs guarantee the same as a home warranty?
No. What is commonly called a home warranty is generally a separately purchased service contract covering specified systems or appliances for a stated term, usually with a service fee. The seller repairs guarantee discussed here is a promise attached to the property transaction.
Will my landlord insurance cover a bad renovation?
Don't assume it will. The defective workmanship itself may be excluded, while resulting damage can depend on the policy wording, cause of loss and endorsements. This is one to check with the insurer rather than infer from the word "renovated."
Should I trust a rent guarantee?
I'd treat it with much more caution than a repairs guarantee. Check how long it runs, whether it's in the contract, what happens if the guarantor stops trading, and whether the guaranteed rent is above what the market actually pays. A guaranteed rent above market is a price discount described as income.
What happens if the turnkey seller goes out of business?
If the company that made the promise disappears or becomes insolvent, enforcing the guarantee may become considerably harder. That's why I care about who actually stands behind the promise, not just how long the document says it lasts.
How much should I hold back for repairs a guarantee won't cover?
I keep at least $5,000 per property. One turnover plus one capital replacement in the same year can go through it, and neither is a guarantee item.
Terms used in this article
| Term | What it means |
|---|---|
| Repairs guarantee | The seller's promise to put right defective renovation work for a period after you buy. |
| Home warranty | A term commonly used for a separately purchased service contract covering specified home systems and appliances for a stated period, subject to limits and exclusions. |
| Deductible | The amount you pay on an insurance claim before the insurer pays anything. |
| Endorsement | A change added to an insurance policy that adds, limits or removes cover. |
| Rent guarantee | A promise that rent will be paid whether or not a tenant is in place. |
| House trap | A U-shaped section of the building drain found in some older properties, usually below the basement floor. Its condition may require a sewer camera or excavation to assess. |
| Capital replacement | Replacing a component that wears out, such as a roof or furnace, rather than repairing it. |
Written by
David Garner
David is co-founder of Cashflow Rentals and a British investor who has personally purchased more than 120 U.S. rental properties as a foreign national since 2016. He helps overseas investors build U.S. rental portfolios remotely, from his base in Brazil.
